Chattanooga-based Unum beats market on British upswing

Chattanooga-based Unum beats market on British upswing

November 5th, 2013 by Ellis Smith in Business Around the Region

Unum President and CEO Tom Watjen delivers the keynote address Wednesday at the annual meeting of the Chattanooga Chamber at the Chattanooga Convention Center.

Photo by John Rawlston/Times Free Press.

Chattanooga-based Unum beat Wall Street expectations by three cents per share in the third quarter, earning $224.6 million, or 85 cents per share, the company reported Monday.

That's enough to top the $224 million, or 80 cents per share, the company earned in the same quarter of 2012.

The insurer was buoyed by an earnings upswing at its United Kingdom division, which grew operating income 13 percent to $31.3 million, thanks to what Tom Watjen, president and CEO, called "aggressive pricing and repositioning actions we're taking in the group."

"Our solid risk results across our core operating businesses, along with the results of our closed block continuing to track with our expectations, resulted in our operating earnings per share increasing approximately 6 percent over the third quarter of last year," Watjen wrote in a letter to employees.

Earnings results were boosted somewhat by the insurer's stock buyback program, which allowed Unum to repurchase $75 million of stock during the quarter, or $269 million for the year. The reduced number of shares outstanding helped earnings per share offset falling revenue during the quarter. Sales and investment revenue declined slightly to $2.54 billion from $2.63 billion during the third quarter of 2012.

Operating income at Unum US continued to lead the company, rising 1.6 percent to $219.8 million. The Colonial Life segment grew operating income to $69 million during the quarter, and even the closed block of business - which represents products the company no longer actively sells - earned $25.7 during the quarter.

Watjen expects the company to continue to grow after-tax operating income to up to 6 percent per share, including the effect of share repurchases.

"Our focus on disciplined underwriting, pricing and risk selection continues to drive solid returns and profitability across our primary business segments," he said. "In addition, although the current environment presents challenges to achieving our longer-term growth expectations, I am very encouraged by the improved sales trends we saw this quarter in several of our markets."

The company's stock price rose 25 cents to close Monday at $31.76, up 0.79 percent.

Contact Ellis Smith at esmith@timesfreepress.com or 423-757-6315.